Best of the Week
Most Popular
1.Trump Delirium Triggers Stock Market Brexit Upwards Crash Towards Dow 20,000! - Nadeem_Walayat
2.The Future Price Of Gold Will Drop Below $1000 In 2017 -InvestingHaven
3.May Never Get Another Opportunity to Buy Gold at this Level Again - Chris_Vermeulen
4.Delirium - The Real Reason Why Donald Trump Won the US Presidential Election - Nadeem_Walayat
5.Why Nate Silver / Fivethirtyeight is one of the Most Reliable Election Forecasting Indicator? - Nadeem_Walayat
6.Gold Price Forecast: Nasty Naughty November Gold Price Trend - I_M_Vronsky
7.Gold Mining Stocks Screaming Buy! Q3’16 Fundamentals - Zeal_LLC
8.Delirium of Trump Mania Win's Mr BrExit US Presidential Election 2016 - Nadeem_Walayat
9.The War On Cash Goes Nuclear In India, Australia and Across The World - Jeff_Berwick
10.Hidden Signs for Gold and Silver - P_Radomski_CFA
Last 7 days
The 10YR Yield and SPX Stocks Bull Markets - 3rd Dec 16
Gold And Silver – Do Not Expect Much Difference With Trump Compared To Obama - 3rd Dec 16
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16
How Moving Averages Can Identify a Trade - 1st Dec 16
Silver Prices and Interest Rates - 1st Dec 16
America, is it Finally time for us to say Goodbye? - 1st Dec 16
Blockchain Technology – What Is It and How Will It Change Your Life? - 1st Dec 16
Burn the Flags, Can Trump Salvage The Sinking US Economic Ship? - 1st Dec 16
Will US Housing Real Estate Market Tank in 2017? - 1st Dec 16
Referendum Puts Italy's Government to the Test - 30th Nov 16
Why We Haven’t Seen Gold Price Rally after Trump Victory - 30th Nov 16
Breakdown and Slide in Crude Oil Price - 30th Nov 16
A 'Wicked Rally' in Gold Price Predicted - 30th Nov 16
Silver Market Sentiment Looks Golden - 30th Nov 16
Indian Demonetization Denotes Severe Stress in the Global Gold Market - 30th Nov 16
Owning Gold and Silver in Troubling Times - 29th Nov 16
Trump's Presidency - Stock Market Crash or Start of New Mega-Trends - 29th Nov 16
Prime Minister Modi's War Against Corruption, Black Money and Fake Currency Notes in India - 29th Nov 16
Can President Trump Really Drain the Swamp? - 29th Nov 16
President Trump’s Economic Plan Isn’t Going to Work - 29th Nov 16
The US Bond Bear Market Has Begun! - 29th Nov 16
Simple Yet Powerful Technical Trading Tools - 28th Nov 16
Public Infrastructure – Welcome to the World of Waste, Fraud, and Abuse - 28th Nov 16
Fifty Years Later, Moore's Computing Law Holds - 28th Nov 16
An Elusive Stock Market Top - 28th Nov 16
This Past Week in Gold - 27th Nov 16
Italian Bank Collapse European Sovereign Bond Carnage, Criss-Crossed Fuses & Lit Bonfire - 27th Nov 16
How to Beat UK Savings Crisis with Child Junior Cash ISA, Pension's and Life-time ISA - 27th Nov 16
Castro Was Not Who You Thought He Was - 27th Nov 16
Understanding the Trump Presidency , Beyond Merkel - 26th Nov 16
US Stocks Bull Market New All Time Highs - 26th Nov 16
Silver Mining Stocks Q3 2016 Fundamentals - 26th Nov 16
MSM's Stock Market Druck'n Suck-In Continues - 26th Nov 16
Gold Price Down 13.5% In 13 Days - Opportunity For Geometric Price Cost Averaging - 26th Nov 16
Tips for Trading Options with Elliott Waves - 26th Nov 16
Germany Pulls the Plug on Market Oracle site for 24 hours, German Election BrExit GerExit Warning Shot? - 26th Nov 16
New NS&I 2.2% Savings Bond Ahead of 2017 Stealth Inflation Theft of Purchasing Power - 24th Nov 16
Establishment Controlled Mainstream Media Launches War on Alternative 'Fake' News - 24th Nov 16
Black Friday Cheap Christmas Lights, How Long do they Last ? B&M Stores Review Video - 24th Nov 16
War On Cash Goes Global – India and Citibank In Australia - 24th Nov 16
Stocks, the Politically-Driven S.O.D. to Lose Again - 24th Nov 16
One of the best buying opportunities in history? - 24th Nov 16
Gold and Monetary Populism: The Oligarchs’ Mortal Enemies – The Peoples’ Salvation - 23rd Nov 16
The Winners and Losers of a Global Trade War - 23rd Nov 16
Why Mexico’s Oil Reform Is A Huge Opportunity For Investors - 23rd Nov 16
Silver and Gold - We Can’t Understand It for Them - 23rd Nov 16
A Review of Nedbank Private Wealth - 23rd Nov 16
Trump’s Financial Revolution! - 22nd Nov 16
Stock Market New All Tiime Highs & the Election Buried This HUGE Story - 22nd Nov 16
Will Crude Oil Price Rally to $50? - 22nd Nov 16
The Spreading Bondfire And The Rising Price Of Gold - 22nd Nov 16
Did The 'Trump Tantrum' Just Trigger The Next US Recession? - 22nd Nov 16
Cheap Money to Continue Flowing & Helicopter Money to Start after 2017 Market Crash - 22nd Nov 16
Gold Price Forecast: Nasty Naughty November Gold Price Trend - 22nd Nov 16
Stocks and Deby - Will Trump Bring Morning or Mourning in America? - 22nd Nov 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

Central Bank Gold Sales Coming to an End?

Commodities / Gold & Silver Oct 03, 2008 - 04:33 PM GMT

By: Julian_DW_Phillips

Commodities Best Financial Markets Analysis ArticleIn the week ending 26th September 2008, the final week of the fourth year of the Central Bank Gold Agreement, two Eurosystem central banks sold less than 1 tonne of gold to complete the fourth year's sales. This makes a total for the year at around 345.5 tonnes of gold sold by the signatories.


The three previous years totals were as follows; year one at 437.2 tonnes, year two at 333.2 tonnes, and year three at 325.8 tonnes. So what will the final year of the Agreement bring? The 'ceiling' placed on gold sales for each year of the Agreement was 500 tonnes, a level never intended to be a target figure of sales, but rather act simply as a limit. This limit was never met, nor will it ever be.

Germany and Switzerland

Last week, two of the signatories have made announcements on future sales.

  1. Firstly, the Swiss National Bank announced in June 2007 that it had concluded the sale of 250 tonnes of gold, and said it had no plans for any further gold sales . It also said its total gold holdings were now at 1,040 tonnes, adding that it planned for no further reduction. In addition, the Swiss National Bank said it would sell 250 tonnes of gold by September 2009, as it decided that due to the rise in the gold price, its gold reserves were too high. It took up the option to sell gold from one of the signatories that relinquished this option.

  2. Secondly, the Bundesbank said it would sell no gold apart from 6.5 tonnes to the German finance ministry, as previously agreed upon. "The remaining sales quota will be offered in its entirety to other central banks taking part in the gold agreement," said the Bundesbank. Under the terms of a five-year deal between 15 European central banks, the Bundesbank was given an option to sell 120 tonnes of gold a year but has consistently offered its quota to other institutions and sold only enough bullion to mint coins [around 5 tonnes a year]. The Bundesbank holds 3,400 tonnes of gold.

These two statements confirm that two of Europe's largest holders of gold will not be selling any significant quantities of gold in the next year. France has been a seller of gold, but we believe, not a satisfied one. There are clear signs of this as the weekly sales of gold in the last few months have been so low that France will not reach the quantity it intended to sell. It still has around 133 tonnes of gold left out of the 600 tonnes it announced it would sell at the commencement of the Agreement. It appears that they made a large sale of between 25 and 30 tonnes a few weeks ago, but the drop to current levels was at a level that would have completed Switzerland's sales only . So, the question hangs in the air, have they stopped selling? With Sarkozy now President and clearly underwhelmed by the financial disasters in the States and now Europe, he is likely to not want to see France's 'crown jewels' sold off for more U.S. dollars.

European Central Bank Sales?

The E.C.B. announced at the beginning of the Agreement that they would only sell 235 tonnes, which they have already completed. However, these sales have normally gone through early in the year of the Agreement, starting on the 27th September of each year agreement year. Once they have sold, the E.C.B. confirmed in the media what they have sold and whether they will sell more or not. There is nothing to prevent them from repeating this again this year in the absence of Germany and increasing their sales above the announced 235 tonnes.

Remaining Sellers?

This leaves only three Central Banks that have been active sellers in the final year of the Agreement. All that remains of the sales targets they announced at the commencement of the Agreement are [around]:

1) France 133.5 tonnes
2) Sweden 15.7 tonnes
3) Netherlands 9.0 tonnes
TOTAL 158.2 tonnes

This is less than half the level of sales we have seen in the fourth year of the agreement. If France has stopped selling, then only 24.7 tonnes of sales remain from the signatory Central Banks over the next 12 months.

If this is the case, then it is not enough to have an affect on the gold price at all, unless the sales by France are conducted in large amounts and are dropped onto the market during opportune times [when the gold price is running up?].

Volumes bought by gold Exchange Traded Funds

To get a better market perspective, look at the amounts of gold bought by shareholders through the gold Exchange Trade Funds over the last three weeks. These amounts reached 145 tonnes, with 32 tonnes bought overnight in one amount twice in that period. We do expect this demand to continue in the face of a decaying global financial system, irrespective of the $700 billion Paulson's Package.

Available to Subscribers only – subscribe through www.GoldForecaster.com

By Julian D. W. Phillips
Gold-Authentic Money

Copyright 2008 Authentic Money. All Rights Reserved.
Julian Phillips - was receiving his qualifications to join the London Stock Exchange. He was already deeply immersed in the currency turmoil engulfing world in 1970 and the Institutional Gold Markets, and writing for magazines such as "Accountancy" and the "International Currency Review" He still writes for the ICR.

What is Gold-Authentic Money all about ? Our business is GOLD! Whether it be trends, charts, reports or other factors that have bearing on the price of gold, our aim is to enable you to understand and profit from the Gold Market.

Disclaimer - This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Gold-Authentic Money / Julian D. W. Phillips, have based this document on information obtained from sources it believes to be reliable but which it has not independently verified; Gold-Authentic Money / Julian D. W. Phillips make no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Gold-Authentic Money / Julian D. W. Phillips only and are subject to change without notice.

Julian DW Phillips Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife